Order: 2011-9-16

Served: September 27, 2011

 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27th day of September, 2011

In the Matter of the

 SMALL COMMUNITY AIR SERVICE

 DEVELOPMENT PROGRAM

under 49 U.S.C. 41743 et seq.

DOCKET DOT-OST-2011-0119

ORDER AWARDING GRANTS

Summary

By this order, the Department selects 29 communities in 22 states to receive financial grants 

under the Small Community Air Service Development Program (Small Community Program) to 

implement the air service initiatives proposed in their grant applications. The communities, the 

amount of each award, and the rationale for the award are listed in the Appendix to this Order. 

Award recipients must affirm the grant award by signature on the grant agreement with the 

Department on or before October 30, 2011. Grant recipients may not seek to draw down or be 

reimbursed funds under this award until they affirm the grant award.

Background

The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21), P.L. 

106-181, April 5, 2002, established a new pilot program, to be administered by the Department 

of Transportation, designed to help smaller communities enhance their air service and address 

issues related to high airfares.1 AIR-21 authorized the Small Community Program through FY 

2003. Vision 100-Century of Aviation Reauthorization Act (Vision 100), P.L. 108-176,

December 12, 2003, amended the program to eliminate the “pilot” status of the program, and

reauthorized it through FY 2008. The FY 2010 Federal Aviation Administration Extension Act

(P.L. 111-69) extends the authorization of appropriations through FY 2011. For FY 2011, the 

Department was appropriated $6 million to carry out the Small Community Program.2

 1 See Orders 2002-6-14 and 2003-9-14 for a complete description of the history of the program.

In total, 

2 A portion of the funds available for the Small Community Program are being used by the Department to 

administer the program.
2

the Department has $15 million available for grant awards.3 Subsequently, a series of temporary 

aviation authorization extensions have extended portions of the authorization for the program. 

When selecting applicants to participate in the Small Community Program, the Department is 

statutorily required to apply the following eligibility criteria:

1. As of calendar year 1997, the airport serving the community was not larger than a small 

hub airport, and had insufficient air carrier service or had unreasonably high air fares;

2. The airport presents characteristics, such as geographic diversity or unique circumstances 

that demonstrate the need for, and feasibility of, the Small Community Program;

3. Not more than 4 communities or consortia of communities4

4. No more than 40 communities or consortia of communities, or a combination thereof, may 

be selected to participate in the program in each year for which the funds are appropriated;

, or a combination thereof, 

from the same State may be selected to participate in the program in any fiscal year;

5. An applicant may not receive an additional grant to support the same project;5

6. An applicant may not receive an additional grant prior to the completion of its previous 

grant.6

In addition, the law directs the Department to give priority to those communities or consortia of

communities where: a) air fares are higher than the average air fares for all communities; b) a 

portion of the cost of the activity contemplated by the community is provided from local, nonairport revenue sources; c) a public-private partnership has been or will be established to 

facilitate air carrier service to the public; d) improved service will bring the material benefits of 

scheduled air transportation to a broad section of the traveling public, including businesses, 

educational institutions, and other enterprises whose access to the national air transportation 

system is limited; and e) the funds will be used in a timely manner.7

The Department is authorized to award grants to communities that seek to provide assistance to:

1. An air carrier to subsidize service to and from an underserved airport for a period not to 

exceed 3 years;

2. An underserved airport to obtain service to and from the underserved airport; and/or

3. An underserved airport to implement such other measures to improve air service both in 

terms of the cost of such service to consumers and the availability of such service, 

including improving air service through marketing and promotion of air service and 

enhanced utilization of airport facilities.8

On July 1, 2011, the Department issued a request for proposals (RFP) from communities 

 3 The Department will be adding $10 million in additional funds that can be reobligated from prior year recoveries.

4 A consortium of communities is defined as a single entity. 49 U.S.C. 41743.

5 However, as stated in our Request for Proposals (Order 2010-7-16), previous grant recipients were free to submit 

grant proposals and seek funds for new projects. Refer to Order 2010-7-16 for a discussion on same projects.

6 49 U.S.C. 41743(c).

7 49 U.S.C. 41743(c)(5).

8 49 U.S.C. 41743(d).
3

interested in receiving a grant this year, and requested that such proposals be filed no later than 

August 2 (Order 2011-7-1). Applicants were required to submit Standard Form 424, a standard 

federal government application form, in Grants.gov. Communities were requested to provide 

information that would help in consideration of their grant requests, including details about their 

existing air services, historical services, current service needs and deficiencies, a full description 

of the community’s proposal, plans for implementation, funding requirements, and plans for 

monitoring the success of the project, including modifying or discontinuing funding if the project 

is not meeting expectations.

Drawing on our experience from previous years, the RFP clarified various issues relating to the 

grant application process, including the sources of local funding, the consideration of in-kind 

contributions, the use of grant funds, and the eligibility to participate by past grant recipients and 

communities now receiving subsidized air service under the Essential Air Service (EAS) 

program. The order further emphasized that communities would be expected to meet the 

financial-contribution commitments that they include in their proposals.

2011 Grant Applications

In response to the RFP, we received 70 grant applications from communities in 34 states. 

Collectively, these communities sought over $36 million in federal assistance to support new and 

ongoing air service development projects. Twelve (12) applications were from communities

classified, based on 2010 enplanements, as small-hub airports and five were from communities 

now receiving subsidized air service under the Department’s EAS program. Forty-two (42)

applications were submitted by communities that received grants in previous years. As required, 

all applicants provided information on historical and current air service and airfare issues facing 

their communities, the economic benefits of air service, proposed initiatives to remedy air 

service or airfare problems, and arguments in support of their proposals. Nearly all the 

communities pledged local contributions – funds collected from local, state, airport, or in-kind 

sources – to complement their requests for federal assistance.

As in previous years, this year’s applications included proposals for feasibility studies, new or 

expanded service initiatives, service upgrades, and assorted combinations thereof. Our review of 

the applications confirmed that air service issues continue to be of great concern to many small 

communities. Nearly all of the applicants cited both service deficiencies and high airfares as 

problems affecting patronage of their air services. Many applicants noted that passengers often 

drive to other, more distant airports that have lower fares or offer a wider range of services to 

more destinations. Despite these “leakage” issues, the communities seeking funds believe that 

demand for improved service at their local airports can be stimulated with financial assistance.

The large majority of applicants specified the need to attract new and/or additional air services to 

their communities. Similar to previous years, a majority of applicants also proposed to 

implement their projects using revenue guarantees or subsidies, together with a variety of 

marketing and promotional initiatives. A critical component of most proposals was funding to 

support community-based marketing and promotional initiatives to stimulate demand and 

community awareness of local airport services. These efforts are directed at publicizing not only 

the availability of air services, but also the convenience of using the local airport compared to 

more congested air service hubs or other nearby airports.
4

This year, several applications either did not meet the basic eligibility criteria for participation 

outlined above and were determined ineligible for consideration, or the application itself was 

deemed incomplete and was not considered.

2011 Grant Awards

The Small Community Program is unique in that it encourages and affords communities the 

opportunity to develop their own solutions to their air service problems based on their particular 

needs and circumstances. By providing communities the opportunity to develop and implement 

air service projects tailored to their individual needs, the program aims to maximize the potential 

for success in the communities’ endeavors. Since the program’s inception, the Department has 

sought to maximize the number of participating communities, and support a variety of solutions 

to the problems identified by applicants in order to provide a wide range of approaches for 

dealing with the challenges faced by similarly situated communities.

With these considerations in mind, we are selecting 29 grant proposals with the objective of 

entering into grant agreements with the communities/consortia identified in the Appendix to this 

order. Grant agreements must be affirmed with the Department before the recipients can seek to 

draw down or be reimbursed funds provided under the grant agreements. In addition, grant 

recipients are subject to all grant conditions and assurances required by federal law, regulations 

and executive orders.9 Funds for these awards will be obligated as of the date of grant award by 

the Department, with subsequent affirmation of the award terms by the selected communities. 

Accordingly, the Department’s grant agreements will be transmitted to the selected communities 

subsequent to issuance of this order.

The proposals we selected incorporate the purpose of the statute and provide an expanded 

opportunity to test a variety of approaches to improving small community air service in all 

regions of the country. For example:

• 19 of the awards are made to communities proposing revenue guarantees and/or marketing 

support as means to attract new carriers, restore lost service or capacity, and/or provide air 

travelers with access to additional markets. These communities are Flagstaff, AZ; Santa 

Rosa, CA; Evansville, IN; South Bend, IN; Dubuque, IA; Baton Rouge, LA; Kalamazoo, MI; 

Bozeman, MT; Albany, NY; Fargo, ND; Grand Forks, ND; Toledo, OH; North Bend, OR; 

Harrisburg, PA; Tri-Cities, TN; San Angelo, TX; Lynchburg, VA; Spokane, WA; and Green 

Bay, WI.

• Three of the awards will assist communities in acquiring scheduled airline service –

Auburn/Lewiston, ME; Pikeville, KY; and St. Cloud, MN.

• The award to Latrobe, PA, will provide assistance for marketing programs to promote future 

expanded service from an existing carrier.

 9 See http://ostpxweb.dot.gov/aviation/X-50%20Role_files/scasdp/Assurances.pdf for applicable conditions and 

assurances.
5

• The award to Loveland, CO, will enable the community to study the possibilities for

developing plans for increased air service.

• The award to Pocatello, ID, will enable the community to support a transition to larger, jet 

aircraft.

• Four grant awards at EAS communities – Crescent City, CA; Escanaba, MI; Manistee, MI;

and Shenandoah Valley, VA – will be used for advertising and marketing their current 

service.10 

All of the selected communities are contributing financial resources to their respective grant 

projects. The local contributions reflect a commitment that is important to the potential success 

of the proposed initiatives. Moreover, nearly all of the communities have (1) established robust 

public-private partnerships to enhance community participation and facilitate access to air 

services, and (2) provided a specific plan and timetable for using their grant funds in a timely 

manner.

In six instances – Loveland, CO; Bozeman, MT; Albany, NY; North Bend, OR; Lynchburg, VA;

and Spokane, WA – we have reduced the grant award amount below the amount requested by 

each community in its proposal. We believe that our reductions should not adversely affect any 

of the community’s air service projects. Accordingly, we are also reducing the local cash 

contribution match offered by the communities by the same percentage as the reduction in grant 

award.

Air Service Development Zone

The statute directs the Department to designate an airport in one community awarded a grant 

under this program as an “Air Service Development Zone” (ASDZ), to work with the community 

or consortium on means to attract business to the area surrounding the airport, to develop landuse options for the area, and to provide data, working with the Department of Commerce and 

other agencies. 49 U.S.C. 41743(h). The Department did not receive any applications requesting 

ASDZ designation.

Grant Agreements

As noted above, the Department will execute grant agreements with each recipient. We also 

stated in the RFP that communities must establish milestones to monitor the progress of the 

proposed projects to determine whether amendments are necessary or whether the grant 

 10 We note that grant applicants currently receiving subsidized air service under the EAS program are precluded 

from using Small Community Program funds to secure air service by other carriers to additional destinations. As we 

stated in our RFP (Order 2011-7-1), we are prepared to entertain applications from EAS-subsidized communities 

that are directed toward improving use of the EAS being provided. However, we will not select proposals that 

would conflict with long-standing EAS policies, including financial support through this program of air services that 

would compete with the EAS, thus drawing traffic from the already subsidized services and increasing the subsidy 

requirements for those services.
6

agreement should be terminated. As we have done in the past, milestones and progress reporting 

requirements will be included in the grant agreements. Federal funds under this grant program 

are disbursed on a reimbursable basis, with the communities expending funds for the grant 

project and then seeking reimbursement. Communities will not be reimbursed for funds 

expended prior to the date on which they affirm the grant award. In seeking reimbursements, 

grant recipients must provide invoices or other evidence of the expenditure, details about the 

expenditure and how it relates to the grant project, and evidence of payment. In addition, the 

legal sponsor is required to certify that each invoice is relevant to the authorized grant project 

and has been paid. Communities will be required to comply fully with the terms of their 

proposals and the grant agreements.

ACCORDINGLY,

1. We select the communities listed in the Appendix to receive grant awards under the 

Small Community Air Service Development Program as described in this order;

2. Grant recipients are subject to all grant conditions and assurances that appear at 

http://ostpxweb.dot.gov/aviation/X-50%20Role_files/scasdp/Assurances.pdf. In addition, 

to the extent that this agreement permits expenditure of the awarded Small Community 

Program funds in any manner that would not be permitted for funds received as part of 

FAA’s Airport Improvement Program (AIP), such permission is strictly limited to the 

expenditure of the Small Community Program funds awarded under this agreement. 

Nothing in this agreement negates the recipient’s obligations to fully comply with FAA 

Order 5100-38C;

3. Grant recipients must affirm this grant award by October 30, 2011. Grant recipients may 

not seek to draw down or be reimbursed funds under this award until they affirm the 

grant award; and

4. A copy of this order will be served on the legal sponsor for each of the communities 

awarded grants.

By:

SUSAN L. KURLAND

 Assistant Secretary for Aviation

 and International Affairs

(SEAL)

An electronic version of this document is available

at http://www.regulations.gov
Appendix

Page 1 of 5

Small Community Air Service Development Program

2011 Grant Awards

State Community Requested 

Funding Federal Funding Description Award Rationale

AZ Flagstaff $800,000 $800,000 

Revenue 

guarantee to 

add a second 

carrier.

Selected as a first-time grantee because the 

community demonstrated the need for a second 

air carrier to support the diverse economic needs 

of the community, from regional business to 

tourism. Proposal addresses the community's 

insufficient air service and isolation from larger 

air service hubs, culminating in material benefits 

to this community.

CA Crescent City 

(EAS) $200,000 $200,000 

Marketing 

existing EAS 

service to San 

Francisco and 

Sacramento.

Selected as a first-time grantee because the 

community demonstrated the need to market 

their EAS service to San Francisco and 

Sacramento. Proposal addresses the 

community's isolation from larger air service and 

local contribution demonstrates commitment to 

the project.

CA Santa Rosa $650,000 $650,000 

Revenue 

guarantee, 

marketing, 

travel bank for 

east bound 

service on 

regional jets.

Selected as a second-time grantee because the 

community demonstrated the need for its first 

east bound service, eliminating connections 

through north or south bound airports. 

Community has shown significant and active 

participation building on success of prior grant. 

Local contribution and strong public private 

partnership provide support for insufficient air 

service to the East.

CO Loveland $339,000 $221,500 

Study to develop 

air service plan 

for commercial 

service and 

intermodal 

issues.

Selected as a first-time grantee because the 

community demonstrated a unique approach to 

studying the intermodal, security and 

commercial air service plans. Funds were 

reduced to exclude the study on general aviation 

options as ineligible. This project includes an 

innovative study proposal with a developed 

timeline.

ID Pocatello $500,000 $500,000 

Financial 

assistance to 

mitigate Delta 

Connection's 

transition to 

regional jets.

Selected as a second-time grantee because the 

community demonstrated a proactive approach 

to retaining its regional jet service at the airport. 

Public private partnership demonstrates this 

isolated community's commitment to addressing 

insufficient air service needs.
Appendix

Page 2 of 5

State Community Requested 

Funding Federal Funding Description Award Rationale

IN Evansville $500,000 $500,000 

Revenue 

guarantee and 

start up 

expenses to 

attract a Star 

Alliance carrier. 

Selected as a second-time grantee because the 

community demonstrated the need to obtain a 

Star Alliance carrier to serve a currently 

underserved market to increase competition, 

lower fares, and provide more connection 

opportunities while reducing leakage at the 

airport. Developed public private partnership 

supports the proposal, which could materially 

benefit this community. 

IN South Bend $750,000 $750,000 

Revenue 

guarantee to 

attract low-cost 

service to 

Denver.

Selected as a second-time grantee because the 

community demonstrated the need to enhance 

service and lower costs at the airport by 

obtaining west bound service on a low cost 

carrier. Local contribution and public private 

partnership, as well as air carrier support, 

indicate community commitment to this 

proposal.

IA Dubuque $500,000 $500,000 

Revenue 

guarantee for 

service to Dallas.

Selected as a second-time grantee because the 

community demonstrated the need to support 

non-stop service to Dallas and improve west 

bound connectivity. Strong local contribution 

and public private partnership demonstrate 

commitment to addressing insufficient air 

service to the West.

KY Pikeville $750,000 $750,000 

Revenue 

guarantee to 

establish 

scheduled air 

service.

Selected as a second-time grantee because the 

community demonstrated the need to support 

its first service at the airport. A very strong local 

contribution and strong broad based public 

private partnership support this isolated 

community's efforts, which could materially 

benefit this community. 

LA Baton Rouge 

(Small Hub) $340,000 $340,000 

Revenue 

guarantee for 

service to 

Washington, DC 

airports.

Selected as a first-time grantee because the 

community demonstrated the need to reduce 

leakage to New Orleans by obtaining east bound 

service to Washington. Small hub with higher 

than average air fares and public-private 

commitment assist with addressing community's 

needs.

ME Auburn/Lewiston $600,000 $600,000 

Revenue 

guarantee and 

marketing for 

first scheduled

service to 

Boston.

Selected as a first-time grantee because the 

community demonstrated the need to obtain its 

first scheduled service. The 2010 feasibility study 

supports service to Boston and connections to 

the East Coast. Proposal addresses the 

community's insufficient air service and isolation 

from larger air service hubs.
Appendix

Page 3 of 5

State Community Requested 

Funding Federal Funding Description Award Rationale

MI Escanaba (EAS) $72,500 $72,500 

Marketing 

assistance to 

help with 

transition to 

larger aircraft.

Selected as a first-time grantee because the 

community demonstrated the need to market its 

new jet service and schedule change. Proposal 

demonstrates commitment to this isolated 

community's air service through local 

contribution and could serve as a working model 

for other EAS communities faced with air service 

changes.

MI Kalamazoo $500,000 $500,000 

Revenue 

guarantee and 

marketing to 

attract new 

service to Dallas 

or other hub 

with better 

south bound 

connections.

Selected as a second-time grantee because the 

community demonstrated the need to secure 

new non-stop service to Dallas, improving 

connections to the southern U.S. Community 

has high air fares and is isolated from larger air 

service hubs.

MI Manistee (EAS) $50,000 $50,000 Marketing the 

EAS service.

Selected as a first-time grantee because the 

community demonstrated the need to market its 

EAS service. Local contribution and public 

private partnership demonstrate commitment to 

the proposal. 

MN St. Cloud $750,000 $750,000 

Revenue 

guarantee for 

service to 

Chicago O'Hare.

Selected as a second-time grantee because the 

community demonstrated the need to obtain 

scheduled service at the community. Local 

contribution and public private partnership 

demonstrate commitment to this proposal.

MT Bozeman (Small 

Hub) $1,000,000 $950,000 

Revenue 

guarantee for 

service to New 

York.

Selected as a first-time grantee because the 

community demonstrated the need to obtain 

summer and winter seasonal service to New 

York. A very strong local contribution illustrates 

the public private partnership's commitment to 

seeking additional service for this community, 

which is isolated from larger hub service.

ND Fargo (Small 

Hub) $750,000 $750,000 

Revenue 

guarantee and 

marketing for 

service to Dallas.

Selected as a second-time grantee because the 

community demonstrated the need to obtain 

service to Dallas, their third largest origin and 

destination market. Community is isolated from 

larger hubs of air service and has insufficient air 

service to Dallas. Community commitment is 

demonstrated through timely use of funds and 

local contribution.
Appendix

Page 4 of 5

State Community Requested 

Funding Federal Funding Description Award Rationale

ND Grand Forks $300,000 $300,000 

Revenue 

guarantee and 

marketing for 

west bound 

service.

Selected as a second-time grantee because the 

community demonstrated the need for west 

bound service and international connection. 

Strong local contribution demonstrates public 

private support and engagement in this isolated 

community's proposal for additional service, 

culminating in material benefits to this 

community.

NY Albany (Small 

Hub) $1,500,000 $750,000 

Revenue 

guarantee and 

marketing to 

establish new 

service to 

Houston.

Selected as a first-time grantee because the 

community demonstrated the need for service to 

the south central U.S. Small hub with higher 

than average air fares and local contribution 

indicating project commitment.

OH Toledo $750,000 $750,000 

Revenue 

guarantee and 

marketing for 

new service to 

Denver.

Selected as a second-time grantee because the 

community demonstrated the need for service to 

Denver providing the community a second 

chance at additional service. Local contribution 

and air carrier support indicate commitment to 

project. 

OR North Bend $600,000 $550,000 

Revenue 

guarantee and 

marketing for 

east bound 

service.

Selected as a second-time grantee because the 

community demonstrated the need for east 

bound service. Air carrier support, local 

contribution, and strong public private 

partnership demonstrate commitment from this 

community, which is isolated from larger hub air 

service.

PA Harrisburg (Small 

Hub) $500,000 $500,000 

Revenue 

guarantee and 

marketing for 

low fare west 

bound service, 

targeting 

Denver. 

Selected as a second-time grantee because the 

community demonstrated the need for west 

bound service. Community was successful with 

previous grant. Proposal illustrates community's 

commitment through air carrier support, local 

contribution, developed public private 

partnership and timely use of funding.

PA Latrobe $200,000 $200,000 

Marketing 

assistance to 

expand Spirit 

Airlines' service.

Selected as a second-time grantee because the 

community demonstrated the need for 

additional air service and showed initiative with 

attracting its own service to Fort Lauderdale and 

Myrtle Beach. Community was successful with 

previous grant. A very strong local contribution, 

public-private support, and air carrier support 

demonstrate community commitment. 
Appendix

Page 5 of 5

State Community Requested 

Funding Federal Funding Description Award Rationale

TN Tri-Cities $250,000 $250,000 

Revenue 

guarantee for 

service to Dallas.

Selected as a second-time grantee because the 

community demonstrated the need for service to 

Dallas. Public private partnership and local 

contribution demonstrate commitment to 

proposal.

TX San Angelo $500,000 $500,000 

Revenue 

guarantee and 

marketing to 

add a second 

carrier.

Selected as a first-time grantee because the 

community demonstrated the need for a second 

carrier with a strong public private partnership 

and support. As an isolated community with 

insufficient air service, this proposal would offer 

material benefits to the community.

VA Lynchburg $800,000 $700,000 

Revenue 

guarantee and 

marketing for 

low fare service.

Selected as a third-time grantee because the 

community demonstrated a unique regional 

approach to pool two additional larger market 

areas into one large market to make it more 

attractive for low fare service. Community was 

successful with previous grant award. 

Community is isolated from larger hub air service 

and demonstrates its commitment to the unique 

project through a local contribution and a 

developed public private partnership.

VA Shenandoah 

Valley (EAS) $150,000 $150,000 

Marketing 

current EAS 

service to 

Washington 

Dulles.

Selected as a second-time grantee because the 

community demonstrated the need to reduce 

leakage at the airport with a well developed and 

targeted proposal. Community was successful 

with previous intermodal grant. Strong local 

contribution demonstrates public private 

partnership commitment to the project.

WA Spokane (Small 

Hub) $1,000,000 $950,000 

Revenue 

guarantee for 

service to the 

L.A. Basin.

Selected as a first-time grantee because the 

community demonstrated the need for air 

service given a high business demand area in the 

L.A. Basin. Local contribution indicates public 

private partnership support for this proposal.

WI Green Bay $500,000 $500,000 

Revenue 

guarantee and 

marketing for 

year-round 

service to the 

West.

Selected as a first-time grantee because the 

community demonstrated the need for yearround western market connectivity. Public 

private partnership and local contribution 

indicate commitment to the proposal.

TOTALS $16,101,500 $14,984,000